Auto Loan Options for People with Bad Credit

Internet surfers with bad credit looking for an auto loan are bombarded with advertisements most days. Many of these ads are truthful in their bad credit auto loan options. However, there are many things to avoid, and this article will describe some of those.

Directly financed auto loans for people with good credit are a bit different than those with bad credit. People with bad credit are expected to pay more of a down payment as well as a higher interest rate on their auto loans. Many creditors won’t even extend an auto loan to those with bad credit. Depending on how bad someone’s credit is, auto loans can range from a 20 – 50% down payment requirement, interest rates from 5-26%, and amortization (the length of the loan) anywhere from 2-4 years.

This may sound like a lot of bad news for bad creditors looking for an auto loan. But with some good planning and foresight, these auto loans can actually help people with bad debts rebuild their credit history.

The worst situations in bad credit auto loans show up when car dealers artificially inflate the pricing or interest rates on their cars. Auto dealers who specialize in bad credit loans will take a car normally selling for $5,000, inflate the price to $8,000, take a $2,500 down payment and then finance the purchase at 24%. Now the bad creditor will be in debt to the auto loan company for an inflated price that isn’t indicative of the vehicle’s real value. A way to counteract these types of sneaky bad credit auto loan dealers is to check the value of the car you are looking at, first, and then only pay $200-500 extra then what’s listed. Only in exceptional circumstances would you ever pay more than this for a car.

Two different ways of selling a car have emerged recently with the new, Internet economy. The first is called the ‘dealer network system’. Auto purchasers can get a loan regardless of their bad credit history with this option. Essentially, a potential customer looks at a car on a website, and then answers some basic questions if interested in buying. This information is then passed along to a dealer specializing in bad credit auto loans. Since there are no fees involved, this can be a real boon for the bad creditor looking for a decent car loan. However, with this system, there is no way of researching the auto dealership you are about to do business with.

The other new option is called an application service. In this situation, a person with bad credit applies online for an auto loan, and the financial information is then sent to multiple lenders at the same time, with the hope that one or two will be willing to take the credit risk. If the system works, several dealerships with fight for the customer, using price and convenience as their selling points.

Last Car News

The Ultimate Corvette

There is no denying that the Corvette is an impressive sports car. With a powerful 400-horsepower V8 engine, classic styling, comfortable interior and excellent handling, what more could one want in an American sports car? So if you had a Corvette with even better handling, more aggressive styling and 105 more horses on tap, would it be any better? Absolutely!!!

That, of course, would be the all-new Corvette Z06. At first glance, it looks like any other Corvette, however those in the know will recognize it immediately. It has an air intake just ahead of the hood, larger rear fender flares with additional air scoops, and unique alloy wheels, and larger exhaust. Of course, there’s also the Z06 badge on the side that has red text on it telling the most important part of the story – 505 HP.

Yes, under the hood is Chevrolet’s LS7 7.0-liter V8 engine that pumps out 505 horsepower and 470 lb-ft of torque. This in a car that weighs just 3,000 lbs. 60 mph comes up in just 3.6 seconds; top speed is close to 200 mph. This is the fastest production ‘Vette ever.

But unlike the Viper, which has similar performance numbers, the Z06 is a civilized ride. It doesn’t cook you like the Viper, although after a long drive, the center console did get pretty toasty. The clutch is not heavy – your leg doesn’t hurt after sitting in traffic. Seats are very comfortable, and it drives smoothly at 40 or 140.

I had the opportunity to drive the Z06 from Portland, OR to Seattle, WA - about 190 miles. Even with some stop and go traffic, I averaged an impressive 22 mpg. This is from a 505 horsepower supercar! This is primarily because at 80 mph in 6^th gear, the engine is only turning about 1800 rpm. Although, I have to say it’s really hard to cruise along at 80 when you know the car can go twice that speed.

But cruising down the highway at 80 is not what this car is about, even if it does it well. This car is about shifting into 2^nd gear at 30 mph, flooring it and having the rear wheels break loose. The V8 sounds fantastic, and acceleration is incredible. It has excellent grip, and when the wheels break free, it’s still controllable. I’ve never driven this car at the track, but it must be phenomenal.

Where the Viper would make a great 3^rd or 4^th car, the Corvette Z06 could easily be a daily driver. It has a good amount of cargo space, storage pockets in the doors, plenty of room for every day stuff.

And with a starting price around $70,000, this car is an incredible deal. Especially when you compare it to Viper ($83,000) or Porsche 911 Turbo ($123.000). Definitely one of the more impressive cars I’ve driven.
--Perry Stern